Diamonds hit with tariffs as hostility between UK and Russia continues

The jewelery industry remains embroiled in hostilities between the UK and Russia as the two countries continue to trade economic blows.

This week, Russia announced sanctions against 287 British MPs, barring them from entering the country.

The travel ban comes in response to an ongoing campaign of economic pressure by the British government, launching punitive measures against Russia as punishment for invading Ukraine in late February.

Among the latest set of sanctions imposed by the British government was a 35% tariff on the import of diamonds from Russia and Belarus.

Import duties will be applied to rough and polished diamonds.

The measures were announced by International Trade Secretary Anne-Marie Trevelayan on April 21.

“The UK continues to stand with Ukraine and is working closely with our international partners to inflict maximum damage on the Putin regime, cutting the resources and funds it needs to fight this war. illegal,” she said.

“We are taking every opportunity we can to increase the pressure to isolate the Russian economy and these new measures will tighten the screws, shutting down lucrative avenues of funding for Putin’s war machine.”

The latest round of economic sanctions expanded the list of products subject to import bans and increased a range of tariffs.

Among the products affected are diamonds, silver, rubber, wood products and luxury items such as caviar. The British government estimates that more than £1 billion (A$1.76 billion) worth of Russian goods will be affected.

Chancellor of the Exchequer Rishi Sunak has said the UK has no intention of relaxing its efforts against Russia.

“We are unwavering in our support for the Ukrainian people,” he said.

“These significant new sanctions against Putin will bring total import duties and bans on Russian products to over £1 billion, imposing further economic pain on Putin’s economy for his barbaric and unwarranted attacks on a sovereign nation.”

Gokhran could buy an Alrosa product

The British government directly sanctioned the Russian diamond mining company Alrosa at the end of March.

During the announcement, the UK government revealed a list of 10 key people and companies targeted. Alrosa was second on this list.

Alrosa is the largest diamond mining company in the world. The company produces more than 32 million carats a year, about a third of the world’s supply.

A third of Alrosa is directly owned by the Russian government.

The British government has banned the import of steel products as well as the export of quantum technologies, advanced materials and luxury goods under the sanctions.

If the UK and US continue to hamper Russia’s ability to sell rough diamonds, the country may continue to wholesale purchase products through the State Precious Metals and Gems Fund – Gokhran.

Gokhran is a state institution that reports to the Russian Ministry of Finance as a depositary and manages the purchase, storage and sale of precious objects, such as diamonds, on behalf of the Russian government.

Russian Finance Minister Anton Siluanov said Reuters the government has remained open to buying its own raw product if the international blockade continues.

“We do not exclude the possibility that Gokhran buys diamonds produced by Alrosa. The amount will be determined later,” he said.

Gokhran previously purchased diamonds valued at more than US$1 billion (A$1.39 billion) during a period of weakened demand caused by global economic turmoil in 2009.

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Sarah C. Figueiredo